Connecticut’s budget deficit continues to grow, according to Gov. Dannel P. Malloy’s budget office.
Ben Barnes, secretary of the Office of Policy and Management, predicted Friday that the state is currently on track to end the fiscal year with a $19.9 million deficit. That’s an increase of $12.8 million over last month.
Barnes attributed the increase to disappointing revenue collections.
He said estimated income tax payments to date “have been disappointing and seem to indicate significant downside risk in our income tax forecast for the rest of the fiscal year.”
The drop in income tax collections, according to Barnes, was likely based on the performance of the stock market in 2015.
Meanwhile, the administration is trying to manage the budget by keeping a close eye on spending.
“While management actions such as heightened scrutiny of hiring and contract approvals are anticipated to help address the overall projected shortfall, revenue performance through the remainder of the fiscal year — particularly April, which represents a significant month for revenue collections — will be the most important factor in determining year-end results,” Barnes wrote in his monthly letter to State Comptroller Kevin Lembo.
Senate Minority Leader Len Fasano, R-North Haven, said April is going to be a tough reporting period.
He said the continued deficits show the “Democrats are killing the state with their fiscal policies.”
Fasano said the “new norm or the new world” that Malloy talked about during his State of the State address earlier this month is not new.
“Just because they took their blinders off doesn’t make it a new world,” Fasano said.
He said it was obvious the state was going to get to this point.
“A shifting workforce, the rapid rise of technology, and stagnant wage growth have made this recovery tougher for everyone, everywhere,” Malloy said on Feb. 3 during his State of the State address. Malloy said Connecticut families and businesses are adapting to the new economic reality and the state’s budget has to reflect that new reality.
In order to deal with that reality, Malloy pitched $560 million spending cut in 2017 and another nearly $700 million in 2018. The budget Malloy proposed doesn’t seek an increase in taxes and calls for the reduction in the state workforce by “more than a thousand” workers.
The current $19.9 million deficit outlined in Barnes’ letter to Lembo is estimated for fiscal year 2016.
Lawmakers are still holding public hearings on the Malloy’s budget proposal.
